Tags: bond | sale | Altria | Philip Morris

Philip Morris Said to Plan Second Dollar Bond Sale This Year

Monday, 04 Nov 2013 12:53 PM

Philip Morris International Inc., the world’s largest publicly traded tobacco company, is planning a benchmark bond offering in three parts, its second U.S. sale this year.

The maker of Marlboro and Parliament cigarettes may sell bonds maturing in more than five years to yield about 70 basis points more than similar-maturity Treasurys, as well as 10-year debt at a relative yield of about 110 basis points and 30-year securities at about a 120 basis-point spread, according to a person with knowledge of the transaction. The offering, its first in dollars since February, may be rated A2 by Moody’s Investors Service and is expected to be sold as soon as today.

Philip Morris may be required to pay a coupon of 2.01 percent on notes maturing in November 2018, according to Bloomberg Valuation estimates. The 10-year bonds may cost 3.61 percent and the 30-year securities may pay 4.65 percent, Bloomberg data show.

Credit Suisse Group AG, Citigroup Inc. and HSBC Holdings Plc are managing the offering for the New York-based company, which split from Altria Group Inc. in 2008, said the person, who asked not to be identified because terms aren’t set.

Proceeds will be used for general corporate purposes, including working capital, share repurchases and debt refinancing, the person said. Benchmark sales are typically at least $500 million.

Altria, which still owns cigarette manufacturer Philip Morris USA Inc., issued $3.2 billion last week to help fund a tender offer, according to data compiled by Bloomberg. The company sold $1.4 billion of 4 percent, 10-year notes and $1.8 billion of 5.375 percent, 30-year securities that are expected to be rated Baa1 by Moody’s.

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Philip Morris International Inc., the world's largest publicly traded tobacco company, is planning a benchmark bond offering in three parts, its second U.S. sale this year.
bond,sale,Altria,Philip Morris
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2013-53-04
Monday, 04 Nov 2013 12:53 PM
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